Figuras maternas: entre recuerdos y olvidos

One of the least explored areas of the clean economy in the U.S. is the developing area of green chemistry, defined by the OECD as, “the design, manufacture, and use of environmentally benign chemical products and processes that prevent pollution, produce less hazardous waste and reduce environmental and

147. JAMES GOLDSTEIN ET AL., MORE JOBS, LESS POLLUTION: GROWING THE

RECYCLING ECONOMY IN THE U.S., BLUEGREEN ALLIANCE 1 (2011), available at

http://www.bluegreenalliance.org/news/publications/more-jobs-less-pollution (citations omitted).

148. See Don Lewis, CEO, Noth America SCA Tissue, Panel at Good Jobs, Green Jobs East: Sustainable Communities & Clean Energy Jobs, 15:30 (Apr. 10, 2012), available at http://www.youtube.com/watch?v=XOJrYYYq3fI (discussing the effects of sustainability on the job market).

human health risks.”149

The chemicals industry is traditionally seen as one of the most polluting industries, most of whose prod- ucts remain untested and presumptively “safe” until proven oth- erwise. Nothing, of course, is further from the truth.

What is less commonly known in the U.S. is the growth of green chemistry in Europe as a direct result of extensive regula- tory reform through REACH (Registration, Evaluation, Authori- zation and Restriction of Chemical Substances) implemented in 2007.150 _{In much the same way that the U.S. auto industry wrote}

itself out of the global market by ignoring efforts to improve fuel efficiency standards in the rest of the world, the U.S. chemicals industry could become uncompetitive because of our outdated chemicals regulation scheme.

First passed in 1976, the Toxic Substances Control Act, or TSCA,151 _{is in dire need of reform. Changes are certainly}

needed in the law in order to improve public and worker health. In BlueGreen Alliance’s 2009 review of green chemistry for the cities of Minneapolis and St. Paul, we noted:

There are over 80,000 chemicals in the U.S. Environmental Protection Agency’s (EPA) chemicals database. Very little information exists about the effects and properties of the vast majority of these. Of the 3000 high production vol- ume chemicals only 7% have a complete set of data about basic toxicity, and 43% have absolutely no publicly availa- ble data on possible acute and chronic health effects, reproductive effects, environmental fate, ecotoxicity or mutagenicity. Approximately 1000 chemicals are added each year, and global chemical production is expected to double every 25 years, further compounding the data gap.152

But increasingly, as in other sectors of the economy, reform is needed in order to protect the economic competitiveness of an important industry. In the BlueGreen Alliance study, The Eco- nomic Benefits of a Green Chemistry Industry in the United States, we noted that the industry had lost 300,000 jobs or 38% of total

149. ALLAN ASTRUP JENSEN, EUROPEAN ENV’T AGENCY, ESTABLISHMENT OF A

EUROPEAN GREEN AND SUSTAINABLE CHEMISTRY AWARD 21 (2001), available at

http://edz.bib.uni-mannheim.de/daten/edz-bn/eua/01/tech53.pdf.

150. REACH, EUROPEAN COMM’N, http://ec.europa.eu/environment/

chemicals/reach/reach_intro.htm (last updated Sept. 14, 2012). 151. 15 U.S.C. §§ 2601–2697 (2011).

152. KATRINA MITCHELL, BLUEGREEN Alliance, The GREEN CHEMISTRY

LANDSCAPE IN MINNEAPOLIS SAINT PAUL6 (2009), available at http://www.blue

greenalliance.org/news/publications/document/Green-Chemistry-vfinal.pdf (citations omitted).

employment between 1992 and 2010. If these trends continue, the industry will lose another 230,000 U.S. jobs by 2030 even though global chemical production is predicted to increase by 4.5% per year.153

This loss is not inevitable, however. As we wrote in 2011: New market opportunities demonstrate how to reverse negative employment trends and put people to work in the chemical industry in the U.S. This report estimates that if, for example, 20% of current production were to shift from petrochemical-based plastics to bio-based plastics, 104,000 additional jobs would be created in the U.S. economy even if the output of the plastics sector remained unchanged.154

The impediment to the innovation necessary to reinvigorate this important industry is an antiquated regulatory framework that encourages the continued mass production of the same chemicals that were grandfathered in under TSCA in 1976. To stay profitable making the same buggy-whip chemicals that were produced thirty-six years ago, the chemical industry keeps cut- ting American jobs and cutting research and development costs. In fact, research and development investment in the U.S. chemicals industry has dropped to 1.5% of sales, less than 45% of the average for the U.S. manufacturing sector.155 _{The Blue-}

Green Alliance has made three key policy recommendations to reverse job loss in the chemicals industry: 1) pass TSCA reform modeled on the European REACH; 2) “[i]mplement comple- mentary policies to promote innovation, commercialization, and the development of human resources to create a greener and safer chemical industry”; and 3) widely disseminate information on chemical products to the public.156

Enacting these three reforms would make the U.S. a leader in green chemistry.

XVIII. FINANCING THE CLEAN ECONOMY

One of the key arguments leveled against the economic recovery program of the Obama Administration (or against other Keynesian approaches to solving chronic unemployment) is that government spending simply replaces private spending in the

153. JAMES HEINTZ & ROBERT POLLIN, BLUEGREEN ALLIANCE, The ECO- NOMIC BENEFITS OF A GREEN CHEMICAL INDUSTRY IN THE UNITED STATES 3 (2011),

available at http://www.bluegreenalliance.org/news/publications/document/ Green-Chemistry-Report_FINAL.pdf.

154. Id. 155. Id. 156. Id. at 5.

marketplace. It does not create additional growth; it simply dis- places private spending with public spending. If markets worked like mathematical models, there might be a persuasive logic to this argument. Unfortunately, as Sir Nicholas Stern reminded us in 2007, markets are “imperfect” and the failure to price the effects of carbon pollution on the global market is the biggest market failure of all.157

This is an enormously important consid- eration in how we think about the role of government in manag- ing a capitalist economy and whether or not public spending always displaces private spending.

Stern calculated the costs to the global economy of making the investments necessary to avoid the worst effects of climate change as a reduction of the annual growth rate of global domes- tic product by about .5% to 1%. By comparison, the cost of doing nothing and absorbing the ongoing costs of disruption to the global economy through severe weather incidents, drought, loss of water access by as many as 2 billion people, and cata- strophic sea level rise was calculated by Stern as at least a 5% per year contraction of the global economy on an ongoing basis. To put this in perspective, during the 2009 global recession, the economy contracted by only 2.4% before starting to expand again in 2010.158

With such high stakes, one of the keys to unlocking both the economic growth potential of the clean economy and avoiding the economic costs of the worst effects of climate change is find- ing a mechanism(s) to finance the transition to clean energy.

The simplest mechanism is to devise an internationally con- sistent price on carbon and other greenhouse gases either through a global carbon tax or a cap-and-trade system of tradable allowances. Either mechanism would have raised revenues, the first through taxes and the second through the sale of allowances. Both would have provided 1) an incentive for private investment in new technologies to avoid the taxes or purchase of allowances and 2) a public revenue pool to spur research and development in new technologies, encourage rapid deployment, and finance the transition costs to communities and poor coun- tries in a multiplicity of forms.

157. Stern Review, supra note 52.

158. COUNTRY NOTES: UNITED STATES, ORG. FOR ECON. CO-OPERATION &

DEV. 1 (2011), available at http://www.oecd.org/gov/budgetingandpub-

licexpenditures/47860866.pdf; see also Timothy R. Homan & Courtney Schlis- serman, Economy in U.S. Expands 2.6% in Quarter; Price Rise Is Slowest in 50 Years,

BLOOMBERG (Dec. 22, 2010, 12:48 PM), http://www.bloomberg.com/news/

However, the failure of federal climate legislation in the U.S. in 2010 and the collapse of the Kyoto process in Copenhagen in December, 2009, have left a void in economy-wide financing of the transition to clean energy. As a result, U.S. policymakers are confronting the dilemma of trying to create an efficient national clean energy finance policy through a hodgepodge of individual local, state, and federal regulations, tax provisions, and financial incentives to encourage the production of carbon neutral energy and the implementation of energy efficiency measures.

In some ways, the fact that such a confusing tangle of poli- cies and initiatives has actually worked to create jobs and reduce greenhouse gases is remarkable. The fact that very few Ameri- cans are actually aware of the dramatic job growth and impressive environmental benefits of these efforts is not in the least surpris- ing. But it is an important accomplishment and one that should give Americans confidence that there is a tested and common sense path forward to avoiding the costs to our economy of struc- tural unemployment and catastrophic climate change.

The good news is that the U.S. has dramatically reduced its emissions of greenhouse gases from the business-as-usual case and is on an entirely different trajectory than it was four years ago.159

While this is partially a result of the economic slowdown of the Great Recession, it is also a result of a series of very impor- tant regulations issued by the EPA and states on fuel efficiency, GHG emissions reduction, wider deployment of renewables and natural gas electricity generation, and growing energy efficiency financing measures.

Secondly, the green economy regulatory and investment mechanisms adopted in the American Reinvestment and Recov- ery Act (approximately $90 billion) created over 997,000 jobs160

and attracted private capital back into the market place at a rate of three dollars of private investment to every one dollar of pub- lic support (a combination of tax relief, direct grants, and loan guarantees).161

Among the financing mechanisms that have proven their effectiveness have been tax programs such as the Production Tax Credit for wind, the Investment Tax Credit for solar, the Advanced Energy Manufacturing Program, and the Advanced

159. See supra Chart 3.

160. JASON WALSH ET AL., BLUEGREEN ALLIANCE, REBUILDING GREEN: THE

AMERICAN RECOVERY AND REINVESTMENT ACT AND THE GREEN ECONOMY 4 (2011),

available at http://www.bluegreenalliance.org/news/publications/rebuilding- green-the-american-recovery-and-reinvestment-act-and-the-green-economy.

Vehicle Technology Loan Program, in addition to the use of traditional federal programs in transportation infrastructure.

The key takeaway from this experience is that, while it is far less efficient than a comprehensive, economy-wide approach, a coordinated set of individual regulations and incentive programs can lead to wide-spread economic growth and environmental benefits. The real question is not whether these programs work but how to expand them to the scale necessary to deal with the scope of the problems.

XIX. WHY REGULATION DOES NOT HURT JOB CREATION